The field: Airbnb was founded in 2008, shaking up hotel and short-term real estate brands by allowing private individuals to rent out rooms and houses to travelers. Since then, it has grown into one of the most valuable private startups in the world, reaching a $ 31 billion valuation at one point.
Airbnb said earlier that it was profitable in 2017 and 2018, and set it apart from many other unicorn companies that have made money before and after going public. The company reportedly lost money in 2019.
But Covid-19 rattled off its business and the travelers who have the power. In May, CEO Brian Chesky said in a letter to employees that revenue for the year would be expected to be less than half of what the company generated in 2019, announcing nearly 1,900 cuts worldwide.
An attempt to increase $ 2 billion in debt and equity during the pandemic valued the company at just $ 18 billion, according to data from PitchBook.
On July 8, guests booked more than 1 million nights of future stays at Airbnb properties, the first time the company has reached this threshold since March 3rd.
Why it matters: Airbnb’s IPO will test interest in money-losing startups as larger tech companies steal the show.
Look at this space: Airbnb has had a number of regulatory battles with local and state governments over the years. During the pandemic, some cities temporarily ran out of short-term rentals, and hosts were forced to pivot to offers that were 30 days or longer.
Apple is the first $ 2 trillion US company
For a brief moment, the United States acquired its first $ 2 trillion business.
The company’s stock has been on fire this year, and has increased nearly 60% after a very short period, reports my CNN Business colleague Paul R. La Monica. And stocks are about to become more affordable for the average investor, which can keep demand high.
Apple’s stock will split four-for-one at the end of the month, cutting the price of a single stock to about $ 116. Apple’s market value will remain the same as the company will have just traded more shares at a lower price.
Big picture: Apple reached the $ 2 trillion mark in just over two years after passing the $ 1 trillion mark. And it took just five months for the stock to more than double after sinking in March.
Two other American tech giants – Amazon and Microsoft – are moving closer to the $ 2 trillion mark, too. Both are valued at about $ 1.6 trillion. Google Owner Alphabet is also worth more than $ 1 trillion.
Together with Facebook, these companies account for about 23% of the S&P 500, according to Goldman Sachs.
Meanwhile, Saudi Aramco, which became the first $ 2 trillion company in December, is now worth $ 1.8 trillion.
Is a recession with double dip on the cards?
America’s stock is rapidly recovering from the pandemic. Professional investors do not think that the real economy will follow the same route.
Their view: Many more – 31% – expect a gradual U-shaped recovery. Worse, 37% of fund managers expect a double-dip recession in which the economy will tumble back to an initial recovery phase.
The findings are another reminder that the stock market is not the economy. Wall Street may have returned to record highs with a quick clip, but there is no guarantee that Main Street is on a similar course.
That said, economic data for the past month have been solid, even as states have an uptick fighting in Covid-19 cases leading to fresh restrictions.
Michael Darda, chief economist and market strategist at MKM Partners, notes that July data on employment, production and sales were all stronger than expected, and that high-frequency data for early August, including unemployment claims, “continue to look good.”
“The economy intelligence tells us that a fiscal shock will die in our face if Congress and the President do not act,” he said in a recent note to clients. “Maybe. Or maybe the market tells us that handball is strong enough, and Fed support is effective enough, to keep the rise independent.”
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Also today: US initial unemployment claims for the week ending August 15 post at 8:30 p.m. ET. Economists surveyed by Refinitiv expect 925,000 new applications, which would be the lowest level since the labor crisis began in March.
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